Voluntary Provident Fund (VPF) Contributions
As per my understanding, PF can be deducted up to 100% of the basic salary (of which 12% is compulsory for EPF, and the balance can be VPF).
Presently, I am deducting 36% (12% + 24%) of my basic salary. My HR informed me that there is a limitation on the interest over VPF (interest will be allowed only up to 20% VPF). However, I have checked and found that the EPFO provides the same interest on both EPF and VPF.
No doubt, VPF is currently a significant saving tool compared to others. EPF attracts good interest. The major point is that in other investments, if you break the premium/payment, the plan will reduce your "Return." In private sector jobs, uncertainty exists. If you take any big policy/investment plan and something adverse happens, and you find/feel you can’t continue it in your bad times, the policymaker takes advantage of your situation.
However, in EPF, you only have to contribute while you are employed, but this will help you in difficult times (if you are jobless and in need of money, you can withdraw the EPF). Though EPF is a retirement plan, we should not withdraw it unless it is absolutely necessary.
Regards